China’s Belt and Road Initiative: A debt or creditor trap?

Southeast Asian nations have long held a vision of building railroads to connect their economies, and today China is creating that network with its Belt and Road Initiative. This month a meaningful link came together with the opening of the China-Laos railway. The BRI is a enormous program – estimated at $1 trillion – launched in 2014 to build a network of ports, railways, and roads linking China more closely with the rest of Asia, Africa, and Europe. 

Since 2017, Beijing has faced criticism from foreign officials and academics for using its financing and infrastructure projects to ensnare poor countries with heavy debt loads and thereby win strategic leverage. They call it “debt-trap diplomacy.” But some analysts question whether this narrative tells the whole story, saying instead that it oversimplifies and distorts the motivations, risks, and relationships between China and the countries accepting BRI projects. 

“We have to ascribe the agency to countries around China – they’re not just victims,” says David Lampton, a China expert and senior fellow at the School of progressive International Studies at Johns Hopkins University.

Why We Wrote This

China is often presented as a predatory lender. But when it comes to infrastructure, that narrative doesn’t capture the complete view – and risks casting nations as victims when they aren’t necessarily.

Snaking around tough mountains and over thorough river valleys, a aim raced along a $5.9 billion Chinese-built railway connecting Laos and China this month, its inaugural run marking the debut of China’s first international rail network.

For Laos, a landlocked nation of 7 million, the 257-mile line from the Laotian capital of Vientiane north to China’s border creates a link to global supply chains that could help Laos attract investment and trade, create jobs, and fuel economic growth. For China, the project is the first phase of an ambitious strategy to expand its rail network by Laos, Thailand, and Malaysia to Singapore.

in addition the debt generated by the venture is a source of concern not just for Laos but also China, experts say, as the economic benefits could take years to realize. And the worries on both sides underscore a growing argue over Chinese leader Xi Jinping’s identifying characteristics Belt and Road Initiative (BRI), of which the China-Laos railway is a meaningful regional link, and whether it amounts to “debt-trap diplomacy.”

Why We Wrote This

China is often presented as a predatory lender. But when it comes to infrastructure, that narrative doesn’t capture the complete view – and risks casting nations as victims when they aren’t necessarily.

The BRI is a enormous program – estimated at $1 trillion – launched in 2014 to build a network of ports, railways, and roads linking China more closely with the rest of Asia, Africa, and Europe. Since 2017, Beijing has faced criticism from foreign officials and academics for using its financing and infrastructure projects to ensnare poor countries with heavy debt loads and thereby win strategic leverage. But some analysts question whether this narrative tells the whole story, saying instead that it oversimplifies and distorts the motivations, risks, and relationships between China and the countries accepting BRI projects.

Passengers present for photos in Kunming, southwest China, at the set afloat of a aim service on the Chinese section of the railway between Kunming and Vientiane, the Laotian capital, on Dec. 3, 2021.

“It’s much more a creditor trap than a debt trap at this point,” says Deborah Brautigam, professor of International Political Economy at the School of progressive International Studies (SAIS) at Johns Hopkins University.

An infrastructure gap

To be sure, there are cautionary situations – such as the often-cited granting by Sri Lanka of a 99-year lease on its Hambantota port to a Chinese company in 2017 to help relieve its debt woes. But Dr. Brautigam and other experts see Beijing less as a predatory lender seeking to force defaults on unprotected developing countries and more as a new player in international construction learning by trial and error – “crossing the river by feeling the stones,” as the Chinese saying goes.

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